House prices rise again

HOUSE prices have risen for the seventh month in a row and interest rates were kept at a record low of 0.5 per cent - as homeowners were given a double boost today.

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CAUTION ‘HITTING’ HOUSING

10th July 2009

A LACK of mortgages was hampering a recovery in the housing market, two of Britain’s biggest housebuilders warned yesterday.

Barratt Developments and Redrow added that potential buyers were being forced to cancel because lenders’ surveyors were saying homes were worth less than the price agreed by builder and buyer.

In so doing, surveyors are improving the loan to value ratio achieved by banks if the deal goes through.

Mick Clare, the chief executive of Barratt, said the problem with mortgage availability could last for a further year, stalling any house market recovery.

He said: “There are far more people looking to buy than a year ago, but the mortgage market cannot support them.”

Redrow agreed, saying two thirds of cancellations were because surveyors had down-valued property.

Barratt shares fell 3½p to 151p, while Redrow’s dropped 11½p to 201p.

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